Luxury real estate is a completely different ballgame from traditional real estate. It’s much easier to come by an average buyer seeking real estate professionals to purchase or sell a standard three-bedroom, two-bathroom family home.
However, affluent clients are looking for agents and brokerages with specific expertise that these niche transactions call for.
Luxury buyers are elusive. There are far fewer of these high-end buyers, and they only need so many properties. Tailoring your approach and learning how to generate luxury leads will help you maximize your chances of scoring a client looking to purchase an extraordinary property.
Understanding Luxury Buyers
The average home buyer is a middle-class family or a couple looking to start a family. They’re more concerned with safety, space, and practicality when approaching the home market.
They’re very mindful of their budget and max price point, and they’ll be willing to forego many luxury amenities. Their greatest concern is that their family will have a warm and cozy roof over their heads.
Luxury real estate buyers have a completely different set of concerns and lifestyles. Although they often want to know that they’re getting a fair deal on a property they’re about to purchase, money is less of an object. They’re typically more specific than other clients and often more demanding.
As a luxury real estate agent, you need to be aware of every feature of a luxury home. These special features are often what separates a luxury property from a normal higher-end property. You should be ready, willing, and able to explain these features in great detail to potential high-end clients.
It’s crucial to remember that explaining or showing extravagant features to a luxury buyer isn’t an upsell. It’s exactly what they’re looking for.
Spend just as much time talking about indoor heated pools as you spend talking about the area’s school district and the property’s proximity to shopping centers. To a luxury buyer, these factors are of equal importance.
Establish Yourself in a New Area
If you’re looking to become a luxury home specialist in a small town in Nebraska, your passion for high end-real estate might not meet the demand for a pricey manor. Wealthy people tend to gather in large concentrations around major metropolitan areas. They need to live within a reasonable commute of where they work, and it’s uncommon for them to seek properties several states away from cultural hubs.
Some of the most expensive real estate listings are in Beverly Hills in Los Angeles, New York City, and Malibu. Interestingly, luxury agents are also seeing properties pop up in Chicago. Note that these high-end homes don’t just exist in the United States. Canada, especially Vancouver, is showing soaring home prices.
Position yourself near larger economies. Look for large tech companies, significant concentrations of major company headquarters, thriving financial districts, or neighborhoods where people in show business tend to live is crucial.
Always Be Prepared To Introduce Yourself to Potential Clients
Many real estate agents use a strategy that people use to ask someone out on a date without seeming too desperate. They’ll strategically plan to bump into potential luxury real estate clients and give the impression that it was a complete coincidence.
Yes, it is a trope from a 90s sitcom. But why question the strategy if it works?
Many stores, restaurants, and coffee shops are hot spots for luxury customers. An upscale establishment that makes healthy lunches near an area where wealthy people live and work is bound to have its fair share of wealthy customers.
Those customers can become your clients if you’re knowledgeable and patient. Always act with compassion, and never be pushy or overly aggressive.
Seek memberships at important country clubs, golf courses, and important community organizations. Treat every outing or hobby get-together like a networking opportunity. You never know when you’ll have an opportunity to bump elbows with someone who may be on the market for a multimillion-dollar property.
Your best bet would be to prepare yourself for the event that you’ll cross paths with them. Your best introduction is always an introduction relevant to their needs, which is why it’s important to read news about influential people in your area and stay abreast. That’s the only way you’ll be able to anticipate what their needs may be.
Don’t overestimate the importance of a positive social media presence. Following the right people on Instagram or LinkedIn can be surprisingly effective.
Successfully landing one or two luxury clients and creating a positive outcome for them will help you to serve similar clients in the future. Your previous clients may come back to you with future real estate needs, and they may recommend you to their friends seeking luxury real estate agents.
Have Solutions for the Problems Luxury Buyers Often Face
Families are often concerned about how safe a house is and if their mortgage payment will be comfortable for their budget. If you’ve worked with a lot of families, it’s clear to see where their hearts and heads are when they’re purchasing a home. Your instincts are already trained to meet them where they’re at.
Luxury home buyers live in a completely different world from the average real estate client. They’re contemplating the tax consequences of purchasing a property. They want to know how private the sale can be and how much privacy they’ll have in their new neighborhood. They want to know how purchasing this property will affect the prenuptial agreement of their upcoming marriage.
If they’re purchasing land or property they intend to demolish for a new development, they’ll have a lot of questions about zoning and how they can use the land.
The concerns of high net worth individuals aren’t anything like the concerns you routinely address without even being asked. In order to effectively provide luxury clients with the assistance they desire, you’ll have to train your brain to anticipate a completely different set of questions you can use to generate prepared answers for your next conversation with your client.
Network With Luxury Real Estate Agents
Real estate is a competitive industry, but meeting more real estate agents may create opportunities to help you further your career in high-end real estate. A busy luxury real estate agent may be willing to team up with you for a few projects.
You’ll learn the basics of the process and have an opportunity to observe the process of a successful luxury real estate agent as they work.
This is a rare opportunity to stumble upon, and you shouldn’t count on it. That having been said, it will definitely never happen if you don’t try. Don’t aggressively approach luxury real estate agents for this opportunity. Instead, network with them and build functional professional relationships.
When you’ve reached a comfortable and established point in your professional relationship, express an interest in working in luxury real estate transactions.
Let the agent know that if they ever could use an extra set or hands or would be able to act as a mentor that you would be interested in that opportunity. Then, be patient and see what happens.
You can politely make this request of every luxury real estate agent you develop a professional relationship with. This will maximize your opportunities of achieving hands-on experience. If you work with multiple luxury real estate agents, that’s even better. You’ll have an opportunity to witness multiple techniques and strategies you can learn from.
Watch for Expired Luxury Listings
Most luxury listings expire several times. This makes a world of sense. The overwhelming majority of people are looking to purchase a property in a much more affordable price range. The median sale price of a home in the first quarter of 2021 was $369,800, a financially feasible figure for most American families.
There is an extremely short list of people who want to purchase a 4,000 square foot 3 bedroom home for $4 million. There’s an even shorter list of people who want to purchase a 13,000 square foot home with a gym, a theater room, and a heated indoor pool for $32 million.
These properties may be an excellent commission for a real estate agent, but they’re incredibly difficult to sell. Luxury real estate agents may make substantial commissions, but rest assured, they really have to work for them.
If you see an expired listing or a property that’s constantly being relisted, that’s an opportunity for you. Rather than approaching the property’s owner with an acknowledgment of their problem, you should approach them with a solution.
Solution-Oriented Practices
Prepare an analysis of the market. Have a detailed list of ideas and strategies you can use to generate interest in the property. Spend a substantial amount of time on your proposal. Type out as much as you possibly can.
Read it, reread it, and reread it again. Look at it until you have it memorized inside and out and you feel fully confident in your ability to relay that information in a clear and concise manner that would be easy for anyone to understand.
Then, call the property owner and arrange a meeting to discuss your solutions. Your confidence will help you nail the first impression.
Owners of luxury properties who are having a difficult time selling often get frustrated, particularly if they don’t understand that luxury properties are, by nature, far more difficult to sell than the average family home. If they’re highly motivated to unload their property, the chances are high that they’ll be willing to entertain new strategies.
Learn From a Real Estate Coach
Luxury real estate agents have very challenging jobs. It’s difficult for them to sell very expensive properties to an extremely narrow audience of people. Luxury realtors have their work cut out for them.
In order to succeed under such challenging conditions, they devote themselves to understanding every aspect of the real estate industry. They need to have a thorough understanding of every strategy they can use to create a successful outcome for their client.
You can do the same thing. Harris Real Estate University’s real estate coaching programs are designed to teach you everything you need to know about becoming a successful real estate agent.
You’ll get one-on-one sessions with a certified coach who can address your specific concerns and answer your unique questions about whatever you’d like to learn. Get direct advice about tackling the luxury real estate market in your area.
Sources:
GDP by County, Metro, and Other Areas | US Bureau of Economic Analysis (BEA)
Learn to Love Networking | Harvard Business Review
Median Sales Price of Houses Sold for the United States (MSPUS) | FRED | St. Louis Fed
